Standard Chartered (STAN) Morgan Stanley 21st Annual European Financials Conference summary

Interest income and revenue outlook

• Net interest income growth is expected to be challenging in 2024 due to a high starting base and declining rates, with assertive pass-through rate management unlikely to be sustained at current levels.

• Wealth management shift will create a $100 million net interest income headwind in 2025 as certain portfolios and client relationships are exited.

• Structural hedge is targeted to grow from $64 billion to $75 billion by 2025, reducing rate exposure and net interest income volatility.

• Revenue growth is supported by strong market and banking flows, with diversification across corridors providing resilience.

Wealth management and relationship managers

• Wealth management continues to benefit from secular trends like middle-class growth in Asia, with a 9-10% CAGR over the long term.

• Focus remains on the Affluent segment, which is less sensitive to market volatility and anchored by core products like mortgages and insurance.

• Relationship manager headcount is targeted to grow 10% annually for five years, with a mix of external hiring and internal training.

• Investments in bancassurance and model portfolios have stabilized return on assets at around 1.4%.

Wholesale banking and market business

• Market business had a strong start to the year, aided by volatility, though policy volatility can dampen activity.

• Client activity includes both tactical and strategic moves, such as prepositioning for tariffs and supply chain adjustments.

• Diversification across trade corridors and currency pairs provides resilience against geopolitical and economic shocks.

• Originate-to-distribute model is a key revenue driver, with growing demand from financial institutions, alternative asset managers, and pension funds.

• Competitive advantages include dollar clearing, large transaction size, and onshore-offshore market presence.